GBPAUD exchange rates to hit 1.75?

In my last GBPAUD report, I predicted GBPAUD exchange rates could hit 1.75 in the weeks ahead. Current levels of 1.741 will not likely remain with further spikes after the UK’s GDP estimates for Q2 on Friday.

Sterling has rallied against most major currencies this week, with little economic releases much of the movement remains focused around last week’s positive retail sales and inflationary releases. Whilst mortgage approvals are down since the Brexit vote their remains a sense of optimism amongst investors.

Will the trend continue? It’s likely that Sterling could find further support on Friday, with its GDP estimates for Q2. Given the huge success of last week’s retail sales I am expecting a positive result for the UK on Friday. I am therefore expecting GBPAUD to hit ranges of 1.75 by the end of the week.

Could GBPAUD exchange rates hit 1.80?

Whilst I remain positive for Sterling in the short term, I would err on the side of caution as we approach the latter part of the year. Much of the current levels fall on the UK’s “limbo” status with Article 50 yet to be invoked. Once government publicly announces when it plans to trigger Article 50, I am expecting Sterling to fall significantly against most of its counterparts.

Sources are mixed, but it looks as though Article 50 could begin anywhere from March/April to late 2017, therefore an announcement could take place anytime soon. If you are need to buy Aussie Dollars in the near future, waiting until after the GDP estimates on Friday could be a strong option.